Irish aircraft leasing firm Avolon boosts status with €9bn buy

Irish aircraft leasing firm Avolon is set to quadruple in size through the $10bn (€8.99bn) acquisition of the leasing arm of New York-headquartered financial holding company CIT Group.

Avolon, which is now wholly owned by China’s Bohai Group and, as a result, is part of the world’s third largest aircraft leasing business, announced the deal yesterday, saying subject to regulatory approvals and customary closing conditions, the transaction should complete during the first quarter of next year.

The CIT deal will boost Avolon’s fleet by another 334 owned and managed aircraft, with a further 133 on order or committed.

Overall, Avolon will have a fleet of 910 aircraft valued at over $43bn. It will also make Avolon the third largest aircraft leasing business in the world with the youngest fleet of the world’s leading three lessors.

The deal will see Avolon grow to four times its size than when it delisted from the New York Stock Exchange 10 months ago.

The company’s founder and CEO, Dómhnal Slattery, said he was “delighted” to announce the transaction, adding that, “from a standing start, we will have built Avolon into a leading global player in six years”. He also hinted that this is unlikely to be the end of Avolon’s expansion drive.

“While this transaction is strategically compelling and will double the scale of Avolon, it is not the summit of our ambition,” he said. “Avolon has a strong brand, a best-in-class fleet, a proven business model, and a long-term strategic shareholder committed to the sector.

“We look forward to continuing to drive the disciplined growth of the business in the years ahead.”

Bohai chief executive Chris Jin added: “Our vision at Bohai is to build each of our transportation finance businesses into global leaders.”

“The business [Avolon] is well-capitalised to pursue further growth opportunities across multiple acquisition channels,” said Davy Stockbrokers in a research note.